Browsing by Subject "economic growth"

In the 20th century global trade began changing dramatically in its volume and its form and in turn, many new theories of trade and economics have been created as a reaction to these changes. Using data from two developing regions--South Asia and Southeast Asia--which are expected to be the global leaders in economic growth in the 21st century, South Asia and Southeast Asia, this paper is an empirical study of the impact of several of the new determinants of growth: export composition/diversification, financial and institutional development, financial volatility, FDI, external debt, energy dependence, and international trade taxes. The author also creates within the model measures of trade balances across several commodities to measure and control for heterogeneity in economic structures and conditions. The study concludes that FDI, financial development, debt, and international trade taxes can be conducive for economic growth in a developing economy while higher inflation, higher interest rates, and export-orientation of some manufactured products should be avoided.

The opportunity costs of defence and the impact of defence spending on economic growth aroused the interest of researchers during the Cold War. The question is topical again, as the war in Ukraine has accelerated international armaments and increased investments in defence. For Finland and Sweden, the issue is also important in terms of future NATO membership, because NATO recommends that its member countries spend at least 2% of GDP on defence. Achieving the limit requires an increase in defence spending from both countries. No case studies on the impact of defence spending on economic growth have been published about Finland and Sweden, but the countries have been discussed as part of broader panel materials. This thesis fills the gap. The thesis applies structural vector autoregressive methods to analyse the period from 1960 to 2021. Granger causality is included in the analysis, because–despite its problematic nature–the concept has a central position in the history of the research topic. Previous literature has considered the identification of a structural model challenging because the determination of bidirectional causality would require a suitable exogenous variable, which is almost impossible to find in this context. The view is challenged by suggesting that a partial identification can be accepted when the interest is focused only on the defence spending shock. The alternative analysis concerning a shorter time period tests the sensitivity of results to a time period. The impulse response analysis suggests that the impact of defence spending on GDP is slightly positive for both countries, but statistically significant only for Sweden. Granger causality is not observed in either direction for either country. Finland's neutral result is in line with expectations and previous literature, but Sweden's positive result is contrary to expectations. The alternative analysis concerning the post-Cold War era confirms that the Finnish result is robust regardless of the time period. The inconsistency with previous literature and the challenges caused by conditional heteroskedasticity raise doubts about the reliability of the Swedish result. The thesis indicates that increases in defence spending will not harm economic growth in Finland and Sweden. The result is surprising, as it has been suggested that previous studies have underestimated the negative impact of defence spending and most of the recent literature supports a negative or neutral impact. Further research is needed, especially on the impact mechanisms and the causes of heterogeneity. Decomposing defence spending could provide answers to unresolved questions.

The empirical analysis of the impact of information and communications technology investments is an active field with continuing developments to try to better capture the practice of technology implementation. The research on ICT payoffs is complex. Many empirical studies performed by economists, management scientists and information field researches come to conflicting conclusions on whether ICT investment has positive correlation with productivity and economic growth. The purpose of this study is to provide additional descriptive information by conducting empirical research with measurement of the economic growth model and analysis of the relevant data. This study examines ICT investment impact on economic growth in a cross-section of EU-27 during 11 years starting from 1996 until 2007. The empirical study is based on an explicit model of economic growth, which has recently been applied in a number of studies exploring economic growth impacts of various components of capital. The work applies augmented version of Solow growth model, which includes accumulation of human capital and information technology capital as well as physical capital. The research is enforced by the analysis of the economy development in EU-27 during the last two decades, changes in labour market and organizational restructuring resulting from ICT investment. The study confirms that the use of ICT is only part of a much broader range of changes, such as labour market and organizational changes that help firms to enhance performance. The analysis shows that the recent technological change has been skill biased, enforcing inequality in wages and employment opportunities among people with different educational levels and shift in occupations. The investigation demonstrates the readiness of European companies to perform organizational changes as they see it to be a key source to competitiveness. The empirical analysis shows that information and communication technologies play a significant role in the recent economic growth of countries that invest sufficient amount in research and development activities, but it does not seem yet to have made a substantial contribution in all European Union 27 countries. The result is supported by the view that those 10 countries have build up a mature stock of physical infrastructure and human capital, which enhance and amplify the effects of investments in information and communication technology. The main results of the study are that physical capital is still a key factor of economic growth in the whole EU-27 country set; neither human capital nor ICT seems to have a significant impact on GDP growth during 1996-2007 in the whole EU-27 country set; improvements in measurement of inputs and outputs would definitely improve the result. The study points out areas for future research.

My research has been motivated by a strong interest to understand the interplay of innovation and standardization. In the contemporary world, when the technological progress appeals as a leading factor in the development and growth, innovation becomes an important matter to research. At the same time distribution of information grows in scale, turning the interaction between innovation and standardization into more diverse and complicated interplay. This leads to the question of IPR and competition policies. Does standardization enhance innovation or does it become a barrier to it? What is the role of intellectual property rights in this? I use a dynamic general equilibrium model with innovation and standardization to study the interplay of intellectual property rights and innovation. The main references for the present research are papers by D. Acemoglu, G. Garcia and F. Zilibotti “Competing Engines of Growth: Innovation and Standardization” (2010) and by Y. Furukawa “Intellectual Property Protection and Innovation: An Inverted U-Relationship” (2010). The research yields a number of results. There exists a U-shaped relationship between growth and competition, formed by the tension between innovation and standardization. When the cost of innovation is relatively high, both strict and loose IPR policies limit innovation, thus a moderate approach is advised. Standardization can cause a multiple equilibria. The usefulness of IPR policy depends on the start-up cost of innovation.